Motion to Dismiss Filed by Property Owner to Defeat Government’s Forfeiture of Warehouse

ONTARIO, Calif., Oct. 03, 2017 (GLOBE NEWSWIRE) — Today, the owner of a Fontana, California warehouse filed a motion to dismiss a property forfeiture action filed by the government on September 14. The Fontana warehouse is one of four warehouses the government claims are subject to forfeiture because they were used to store aluminum pallets imported from China and owned by Perfectus Aluminum Inc. (the “Company”).

The forfeiture claim against all the warehouses is grounded on the government’s claim that the Company allegedly violated U.S. law in importing the pallets under false pretenses. But as set forth in the motion to dismiss, the Company did not violate any law in importing the pallets, as is evident from basic facts already acknowledged by the government to be true, and forfeiture is precluded in any event by the government’s own conduct. The motion seeks dismissal based on the following legal grounds, among others:

The forfeiture claim improperly seeks to retroactively apply a 2017 determination by the U.S. Department of Commerce (DOC) concerning aluminum pallets. At the time pallets were imported, the DOC had not clarified whether its orders concerning antidumping and countervailing duties related to aluminum extrusions from China (called AD/CVD Orders) applied to such pallets, which are finished products, not extrusions under the DOC rules. The DOC only this year determined that the AD/CVD Orders apply to such pallets, but that ruling is not yet final. Moreover, that ruling does not apply retroactively, and thus does not govern Perfectus’ pallets, which were imported years ago. If anything, the recent DOC ruling underscores that the pallets were imported in good faith and that, until recently, the government treated the pallets as not subject to the AD/CVD Orders. DOC’s ruling is also subject to judicial review by the Court of International Trade, and Perfectus intends to commence an action in that court once the DOC ruling is finalized, which for unexplained reasons has been atypically delayed by the government.

In light of the DOC rulings that existed at the time the pallets were imported – those prior to the new 2017 DOC ruling – Perfectus’ classification of its pallets was proper, and was made in good faith. That, coupled with the government’s own acquiescence and inaction, negates the government’s baseless contention that Perfectus made “knowingly false” statements to avoid the AD/CVD Orders and related duties.

The government has already inspected Perfectus’ pallets on multiple occasions over the past six years. Each time, it explicitly or implicitly certified that Perfectus paid all appropriate duties. Claiming—several years later—that these same pallets were actually smuggled into the country, seizing them along with the warehouses that stored them, and attempting to extract a punitive levy is a clear violation of due process.

There has been an unreasonable, unjustifiable delay between the import of the pallets and the initiation of these forfeiture proceedings. The government previously argued that it would present evidence justifying the detention of Perfectus’ property at a later date—but, ultimately, it simply stonewalled for a year, selectively leaking information to news media while keeping the information from Perfectus.

The owner of the Fontana warehouse filed the motion to dismiss with the Court on October 3, 2017.